Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 7, Problem 2TP
It is proper budgeting procedure to begin with estimated revenues, but why might some nonprofit entities begin planning their expenditures instead of their revenues?
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Students have asked these similar questions
Why is it important to include a budgetary committee in the budgeting process?
Which of the following is NOT correct about budgetary control.
Select one:
O a. It is a legally compulsory process which is controlled by
governments.
O b. It is the process of establishment of budgets relating to various
activities and comparing the budgeted figures with the actual
performance for arriving at deviations, if any.
O c. There cannot be budgetary control without budgets.
O d. It is a system which uses budgets as a means of planning and
controlling.
Discuss how are budgets used to help organizations plan for future and how are budgets used for controlling operations?
Chapter 7 Solutions
Principles of Accounting Volume 2
Ch. 7 - Which of the following is not a part of budgeting?...Ch. 7 - Which of the following is an operating budget? A....Ch. 7 - Which of the following is a finance budget? A....Ch. 7 - Which approach is most likely to result in...Ch. 7 - Which approach requires management to justify all...Ch. 7 - Which of the following is true in a bottom-up...Ch. 7 - The most common budget is prepared for a...Ch. 7 - Which of the operating budgets is prepared first?...Ch. 7 - The direct materials budget is prepared using...Ch. 7 - Which of the following is not an operating budget?...
Ch. 7 - Which of the following statements is not correct?...Ch. 7 - The units required in production each period are...Ch. 7 - The cash budget is part of which category of...Ch. 7 - Which is not a section of the cash budget? cash...Ch. 7 - Which budget is the starting point in preparing...Ch. 7 - Which of the following includes only financial...Ch. 7 - Which budget evaluates the results of operations...Ch. 7 - What is the main difference between static and...Ch. 7 - What is a budget and what are the different types...Ch. 7 - What is the difference between budgeting and...Ch. 7 - What are the advantages and disadvantages of the...Ch. 7 - Why might a rolling budget require more management...Ch. 7 - What information is necessary for the operating...Ch. 7 - What operating budget exists for manufacturing but...Ch. 7 - What is the process for developing a budgeted...Ch. 7 - Which of the financial budgets is the most...Ch. 7 - A company has prepared the operating budget and...Ch. 7 - Fill in the blanks: A flexible budget summarizes...Ch. 7 - What information is included in the capital asset...Ch. 7 - Why does budget planning typically begin with the...Ch. 7 - What steps should be considered it a budget is to...Ch. 7 - Blue Book printing is budgeting sales of 25,000...Ch. 7 - How many units are in beginning inventory it...Ch. 7 - Navigator sells GPS trackers for $50 each. It...Ch. 7 - One Device makes universal remote controls and...Ch. 7 - Sunrise Poles manufactures hiking poles and is...Ch. 7 - Given the following information from Rowdy...Ch. 7 - Each unit requires direct labor of 2.2 hours. The...Ch. 7 - How many units are estimated to be sold it...Ch. 7 - Cash collections for Wax On Candles found that 60%...Ch. 7 - Nonnas Re-Appliance Store collects 55% of its...Ch. 7 - Dream Big Pillow Co. pays 65% of its purchases in...Ch. 7 - Desiccate purchases direct materials each month....Ch. 7 - What is the amount of budgeted cash payments if...Ch. 7 - Halifax Shoes has 30% of its sales in cash and the...Ch. 7 - Cold X, Inc. uses this information when preparing...Ch. 7 - Using the provided budgeted information for...Ch. 7 - The production cost for a waterproof phone case is...Ch. 7 - Lovely Wedding printing is budgeting sales of...Ch. 7 - How many units are in beginning inventory if...Ch. 7 - Barnstormer sells airplane accessories for $20...Ch. 7 - Rehydrator makes a nutrition additive and expects...Ch. 7 - Cloud Shoes manufactures recovery sandals and is...Ch. 7 - Given the following information from Power...Ch. 7 - Each unit requires direct labor of 4.1 hours. The...Ch. 7 - How many units are estimated to be sold if Kino,...Ch. 7 - Cash collections for Renew Lights found that 65%...Ch. 7 - My Aunts Closet Store collects 60% of its accounts...Ch. 7 - Gear Up Co. pays 65% of its purchases in the month...Ch. 7 - Drainee purchases direct materials each month. Its...Ch. 7 - What is the amount of budgeted cash payments if...Ch. 7 - Earthies Shoes has 55% of its sales in cash and...Ch. 7 - Judges Gavel uses this information when preparing...Ch. 7 - Using the following budgeted information for...Ch. 7 - The production cost for UV protective sunglasses...Ch. 7 - Lens Junction sells lenses for $45 each and is...Ch. 7 - The data shown were obtained from the financial...Ch. 7 - Echo Amplifiers prepared the following sales...Ch. 7 - Prepare a budgeted income statement using the...Ch. 7 - Spree Party Lights overhead expenses are: Prepare...Ch. 7 - Relevant data from the Poster Companys operating...Ch. 7 - Fill in the missing information from the following...Ch. 7 - Direct labor hours are estimated as 2,000 in...Ch. 7 - Fitbands estimated sales are: What are the...Ch. 7 - Sports Socks has a policy of always paying within...Ch. 7 - Prepare a flexible budgeted income for 120,000...Ch. 7 - Before the year began, the following static budget...Ch. 7 - Caribbean Hammocks currently sells 75.000 units at...Ch. 7 - Total Pops data show the following information:...Ch. 7 - Identify the document that contains the...Ch. 7 - Titanium Blades refines titanium for use in all...Ch. 7 - Lens & Shades sells sunglasses for $37 each and is...Ch. 7 - The following data were obtained from the...Ch. 7 - TIB makes custom guitars and prepared the...Ch. 7 - Prepare a budgeted income statement using the...Ch. 7 - Prepare a budgeted income statement using the...Ch. 7 - Relevant data from the operating budget of The...Ch. 7 - Fill in the missing information from the following...Ch. 7 - Mesa Aquatics, Inc. estimated direct labor hours...Ch. 7 - Amusement tickets estimated sales are: What are...Ch. 7 - All Temps has a policy of always paying within the...Ch. 7 - Prepare a flexible budgeted income statement for...Ch. 7 - Before the year began, the following static budget...Ch. 7 - Artic Camping Gears currently sells 35,000 units...Ch. 7 - Prob. 14PBCh. 7 - Identify the document that contains the...Ch. 7 - Replenish sells shampoo that removes chlorine from...Ch. 7 - Why is a clear understanding of managements goals...Ch. 7 - It is proper budgeting procedure to begin with...Ch. 7 - How would a human resources department use...Ch. 7 - How would maintenance departments use information...Ch. 7 - How might service industries predict revenue?Ch. 7 - The management of Hess, Inc., is developing a...Ch. 7 - When would a static budget be effective in...Ch. 7 - If management is being evaluated on their ability...Ch. 7 - If management is being evaluated on their ability...
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- Which of the following is NOT correct about budgetary control. Select one: a. It is a legally compulsory process which is controlled by governments. b. There cannot be budgetary control without budgets. c. It is a system which uses budgets as a means of planning and controlling. d. It is the process of establishment of budgets relating to various activities and comparing the budgeted figures with the actual performance for arriving at deviations, if any.arrow_forwardA board sets aside resources to earn investment income to support general operations. Would the resources set aside be recorded in a fund with donor restrictions or a fund without donor restrictions? Would the earnings be recorded in a fund with donor restrictions or a fund without donor restrictions?arrow_forwardBudget comparison schedules or statements are needed for which funds? Should the budgetary comparison schedules' real revenues and expenditures be presented in accordance with GAAP? Why are you or are you not?arrow_forward
- Government organizations and not-for-profit organizations (NPOs) are largely governed by their budgets, not the marketplace. Consequently, the budget, not the financial statements, is the most significant financial document. Nonetheless, most financial reports do not present much detail on the budget Do you think the coverage of the budget in the financial statements is adequate? Why?arrow_forwardWhich of the following statements is the intended goal or outcome of a traditional line-item budget? Estimate the costs of accomplishing measurable tasks or activities Provide mechanisms for expenditure control Focus attention on the value of public services provided Require crosswalks to identify appropriations to agenciesarrow_forwardWhich of the following is true regarding capital projects funds? Multiple Choice Encumbrances accounting is generally employed. All budgetary accounts are employed and budget to actual statements are prepared. No budgetary accounts are used. Encumbrances accounting is not normally employed, but Appropriations are recorded.arrow_forward
- Describe the purpose and the financial reporting requirements for the General and Special Revenue Funds. Include the way the modified basis of accounting is used to account for revenues and expenditures along with the use of budgetary accounts in your discussion.arrow_forwardGovernment organizations and not-for-profit organizations (NPOs) are largely governed by their budgets, not the marketplace. Consequently, the budget, not the financial statements, is the most significant financial document. Nonetheless, most financial reports do not present much detail on the budget. How can a budget be described as important, but comprise a small component of the governmental financial reports?arrow_forwardAn internal service fund normally uses which of the following budgetary accounts? Multiple Choice Encumbrances. Estimated Revenues. Appropriations. An internal service fund normally does not use budgetary accounts.arrow_forward
- (CMA adapted) The process of creating a financial plan of the revenues and resources needed to carry out activities and meet financial goals is referred to as: Group of answer choices budgeting. benchmarking. cost - benefit analysis. value - added analysis.arrow_forwardTRUE OR FALSE. Please provide an explanation if false. 1. Technically, only the Journals and Ledgers are considered accounting records; the Registries are budget records. 2. Separate accounting records and budget registries are maintained for each fund cluster. 3. Government entities and business entities use term "obligation" or the phrase "incurrence of obligation" similarly. 4. The various registries maintained by government entities primarily serve as internal control for controlling and monitoring the conformance of actual results with the approved budget. 5. A check disbursement is normally recorded as a credit to the "Cash-Modified Disbursement System (MDS), Regular" account. 6. Both the ORS and RAOD are updated each time an obligation is incurred, a payable is recorded for the obligation incurred, and disbursements are made to settle the recorded payable 7. At the end of each year, an adjustment is made to revert…arrow_forwardA board sets aside resources to earn investment income to support general operations. Would the resrources set aside be recorded in a fund with donor restrictions or a fund without donor restrictions? Would the earnings be recorded in a fund with donor restrictions or a fund without donor restrictions?arrow_forward
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